26 March 2018 - Bourse Securities

Bourse Report | 26.03.2018 | AMCL, AMBL Earnings Decline

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good morning Trinidad and Tobago and welcome to the boss report today we're taking a look at answer McHale as well as answer moochin Bank Limited one stock in the conglomerate sector of the trend and velu sock exchange and the other in the non banking finance sector like most like most companies in financial 2017 they would have confronted significant headwinds in terms of maintaining profitability and that would have been reflected in their financial for performance let's take a look first at Anza McHale and for the year ended December 2017 the group recorded an earnings per share of just around three dollars and 15 cents a 21 percent decline from the $4 recorded in the prior comparable period of 2016 the only notable Green Line item was an increase in revenue of just around 4.1 percent however that was not enough to Steve of an increase in costs which led to a decline in operating profits of just our own eleven point two percent from one point one one five billion dollars to just around nine hundred ninety million dollars taxes were also higher on average with an effective tax rate of around 33% in 2017 as compared to just

around twenty seven and a half percent in 2016 and he could see a 5.1 percent increase in taxes despite lower profits which led to profit after taxes declining just our own 19.3% from eight hundred and three million dollars just around six hundred and forty eight million dollars taking a closer look at the revenue and profit before tax story the group did manage to record its highest level of revenues in the past four years of our own six point two four billion dollars however they also recorded their lowest level of profits before taxes in the same period period of about just 0.9 seven billion dollars and nine point three percent decline from the prior period which speaks a little bit to operating margins are declining operating margin which was addressed in the Chairman's statement where it was mentioned that a focus would be pleased in the coming fiscal year on operating margins and cost efficiency now there were declines all across the group's profit before taxes by Sec business segments as you can see manufacturing packaging and brewing in red declined just around 2.4 percent and

PBT from 455 to 444 million whereas the insurance and financial services segment declined just around six point three percent from 331 million the 310 million dollars in the automotive trading and distribution segment was one of the probably the worst in terms of its business segment performance with a 24 percent decline from 2015 to 2016 from 255 to 192 million dollars Datsun Green followed by another 35 percent decline over 2016 to 2017 from 192 million dollars in PBT to just around 125 million dollars so again significant headwinds with more than 70% of the group's business focused on a Trinidad and Tobago market now at a price of just around $60 answer McHale is trading at a price to earnings multiple of just her own just around 19 times which is above the sector average of around 15 times PE and offers investors a trilling dividend yield of just around two and a half percent below the sector average of around 2.9 percent now on the positive side the group was able to preserve the amount of dividends per share pit investor which is a dollar and fifty cents increasing is drilling dividend payout ratio from about 37 percent

adjust around 40 percent but importantly cash loose investors or shareholders has been preserved so on the basis of relatively stable cash flows by dividends but tempered by a weak operating mean operating jurisdiction being wicked a test render and tobago Bosman teens it's neutral reading on answer McHale and tenon quickly answer mooch and Bank Limited the company reported earnings per share of just around $2 and 71 cents a 7 point 8 percent decline from the $2 94 cents reported in its fiscal year 2016 operating income was up just around 20.6% or 168 million dollars net operating income was also up around nine point one percent from 533 to 582 million dollars however a hired modern proportionate increase in costs would have led a decline in profit before taxes by about 2.6 percent a three hundred and fifteen million dollars high effective tax rate from 21 to around 25 percent also we'd on profits after tax which declined ultimately seven point seven percent or about two hundred and thirty two million dollars and solution Bank strength remained in terms of perform business segment performance in

the banking services segment in blue and we see here a nice study uptrend in profit before taxes from the bank and service segment general insurance however had managed a decline from nineteen point seven to seventy three million dollars and the mutual fund sector our segment actually increased from about four four million dollars in profits in 2016 to just around twelve and a half million dollars so some positive news there also importantly finds him which and bank earnings from or profit before taxes broken on by geographical segments we see importantly that profit before taxes from the international segment in the most recent year accounted for just around thirty two point seven percent of total profit before taxes which is a nice positive trend whereas in 2014 just around four percent of profit before taxes were generated from anthem anthem which and banks overall business from international sources so at a price of just around forty dollars and to moochin Bank is trading at around 15 times PE multiple which is above the sector average of around twelve point one times and offers investors a trilling dividend

yield of just around three percent below the sector average of around three point two percent so but the good news being an increasing reliance on international revenue and internationally generated revenues but again with its media operation jurisdiction being weaker Trinidad and Tobago boss maintains its neutral reading on anthem which and bound limited for more information give us a call a two two six eight seven seven three visit our website at www.investmentpitch.com have assaulter greets investing week this has been the bosch report you

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